Tax plans level playing field

Congress is in the midst of moving a tax bill that is essential to the United States’ economic future. Here are some facts as to why it is so important to our company, our workers and our community.

Procter and Gamble sells consumer products in more than 180 countries and territories. We have 25 manufacturing sites located in 19 U.S. states and territories, as well as nearly 90 manufacturing sites in foreign countries. In Mehoopany, we employ nearly 2,000 people. Within Pennsylvania, P&G purchases about $860 million of products and services from more than 630 suppliers.

At P&G, we believe tax reform is crucial for both our company and our country. The U.S. tax system puts American companies at a competitive disadvantage in the global marketplace. P&G has been a global company for more than 100 years. In fact, one in five of P&G’s U.S.-based jobs support our international business, in areas such as manufacturing, marketing, innovation and supply chain management. So, when P&G succeeds in international markets, it means we succeed here at home, too.

However, the U.S. corporate tax rate is among the highest in the developed world at 35 percent. The current global average for developed countries is about 24 percent, and countries are lowering their rates further, creating a downward trend. This makes it harder for P&G and other U.S.-headquartered businesses — small and large — to compete with peer companies headquartered overseas. It also reduces the competitiveness of the U.S. economy as a place to do business and create jobs. Congress is currently considering legislation that would lower the corporate tax rate to 20 percent.

Congress also is considering legislation that would move the U.S. tax code from a worldwide corporate income tax system to what is known as a territorial tax system. This would help American companies, including P&G, compete on a level playing field. Unlike P&G, our competitors headquartered outside the U.S. — who already operate under a territorial system — do not pay additional tax to their home countries when they sell products outside their home countries. Because 60 percent of P&G’s sales are global, the current U.S. tax code puts us at a competitive disadvantage. Other American companies are in a similar position.

As members of Congress debate whether or not to pass tax reform in the coming weeks, it is important to remember that economic growth and jobs in our community depend on having a competitive U.S. tax system. The details will matter, but a tax system with a 20 percent corporate tax rate and a modern territorial tax system will boost economic growth here at home and level the playing field for U.S. businesses and workers — including P&G’s U.S. employees in Mehoopany.

We welcome user discussion on our site, under the following guidelines:

To comment you must first create a profile and sign-in with a verified DISQUS account or social network ID. Sign up here.

Comments in violation of the rules will be denied, and repeat violators will be banned. Please help police the community by flagging offensive comments for our moderators to review. By posting a comment, you agree to our full terms and conditions. Click here to read terms and conditions.